{"id":7826,"date":"2016-11-22T14:03:35","date_gmt":"2016-11-22T06:03:35","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=7826"},"modified":"2022-07-01T04:05:11","modified_gmt":"2022-06-30T20:05:11","slug":"hudc-flats-en-bloc-sale","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/hudc-flats-en-bloc-sale\/","title":{"rendered":"HUDC flats: Will more face en-bloc sales in 2017?"},"content":{"rendered":"
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2016 was an interesting year for the collective sale market. There has been two successful enbloc sales of privatised HUDC \u00a0flats (Housing & Urban Development Company) in Singapore – Shunfu Ville and Raintree Gardens. Is this a sign that HUDC flats will be of pertinent interest to developers in the future? What are the intrinsic factors that drives this interest from developers? We take a closer look whether there may be more HUDC flats that can go en bloc from 2017 onwards.<\/span>\t<\/p>\n

\"HUDC
HUDC flats, such as Raintree Gardens, are the latest properties to face en-bloc sales<\/figcaption><\/figure>\n

Key reasons why HUDC estates are collectively sold in 2016<\/strong><\/h3>\n

Developers seem to be keen on collective sale recently because they are running low on land inventory, and land available under Government Land Sales (GLS) just simply isn\u2019t enough for them. It is a well-established fact that has garnered developers\u2019 appetite for acquiring sites outside the GLS this year. Fundamentally, they will need land for development or at least have some sites in their land bank to achieve their longer term corporate and business objectives. <\/span>\t<\/p>\n

That aside, the reason why developers are choosing to re-develop HUDC sites, instead of older private condo estates, is because of product differentiation. HUDCs can be described to be privatised HDBs, without the added amenities that are present in condos. Hence, if they are demolished and replaced with a condo project, there is a higher margin of profitability as condos can generally be sold at a higher price.<\/span>\t<\/p>\n

On the other hand, if an old condo development is torn down and redeveloped into another condo, the difference between the new and old product won\u2019t be that great.<\/span>\t<\/p>\n

Moreover, by opting to re-develop HUDC flats, developers can also actively tap into an existing pool of buyers – \u00a0the HUDC owners themselves. After being displaced from an en-bloc sale, HUDC owners can consider buying a new condo unit in the same location from the developer instead of sourcing elsewhere. The fact is that most owners of any collective sale are familiar with where they have been living, and if they have a chance to live back to the locality, they will do so. In this case, there are higher chances of HUDC flat owners who might buy a condo back into the new development when the project is eventually launched. <\/span>\t<\/p>\n

Another reason why it is easier to get HUDC flat owners to sell their flats through collective sale is because of the relatively lower expectations compared to typical private residential property home owners. As mentioned, HUDC flats lack facilities and are at most gated (the only similarity with a private condo development). The flat owners are generally more willing to give up their existing property for a good price (good collective sale premium), compared to a private condo owner who felt they are already used to living with a host of amenities and the status of living in a private property.<\/span>\t<\/p>\n

Why Raintree Gardens and Shunfu Ville were selected for en-bloc<\/b><\/h3>\n

Both estates are fairly centrally located in the Rest of Central Region (RCR). \u00a0However, the very fact that both these HUDC developments managed to push through their eventual collective sale probably hinge on these factors as well:\u00a0<\/span>\t<\/p>\n